A World Bank report
suggests that growth is likely
to slow down, with
inflationary pressures set to
rise among the central and
eastern European states that
recently joined the EU.
The report which covers the
eight central and eastern
European countries that
joined the EU in 2004 as
well as Romania and
Bulgaria, which joined in
2007, warns that even though
growth has gained pace in
2006, it is likely to cool
down in 2007.
The document
published on 31 May 2007,
spells out a clear warning
of inflationary pressures,
which the report says is
"mounting in several
countries in the region.
Inflation is rising rapidly
in the Baltic countries,
especially Latvia, and also
on an upward trend in Poland
and the Czech Republic. In
Hungary inflation has been
spurred by large
administered price
increases."
"Most countries in the
region are not taking
adequate advantage of the
strong growth to improve
public finances," said
Thomas Blatt Laurensen, the
report's lead author at the
World Bank. He added:
"Reform momentum in the
region ahs generally waned
owing to post-accession
reform fatigue, unstable
political situations, and
weak administrative
capacity."
The report also notes
that thanks to the Common
Agricultural Policy (CAP),
EU accession has led to a
"substantial increase in
agricultural income" in the
ten new eastern and central
European member states.
However, the report finds
large differences in income
growth, as well as
agricultural structures, and
that labour productivity
lags far behind the EU15
average.
"EU8+2 agriculture and
rural development challenges
cannot be addressed by
agricultural policy alone,"
the report concludes,
calling for sector
restructuring and
non-agricultural support
policies.